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Focus on What Matters.

July 21, 2017

For Patients

by Sara McFarland

The Benefits of Long-Term Financing vs Short-Term Credit

After undergoing extensive medical procedures, patients are often faced with another difficult decision: how to pay their expensive medical bills. There are many options, one of the most popular of which is short term credit financing. However, recently, more and more people are opting for long-term financing options like Parasail Patient Payment Plans because of the benefits associated with this type of medical financing.

Here, we will examine the benefits of long-term financing and how it is making patient financing easier on the patient, their family, and even their doctor.

Interest Rates

Short-Term: Short-term credit options come with variable interest rates. This means that the interest rate a patient has to pay the credit company could be subject to change. Often times that change is very steep and costly. If a patient misses a payment or is even just late with their payment, then the interest rate can jump up considerably.

Long-Term: Because Parasail offers fixed rate loans, a patient knows what their interest rate will be throughout the entire duration of their payment period. There are no hidden fees or changes to rate midway through payment. Keeping interest rates down can be extremely valuable for patients, and is a great way to cut medical expenses.

Planning

Short-Term: Due to the variable rates of short-term credit options, patients can have an extremely hard time planning out their payment schedule. Financial planning is an integral part of dealing with medical expenses because the charges can rack up so quickly that it may be overwhelming.

Long-Term: The fixed interest rates associated with Parasail and long-term financing allow for patients to not feel so overwhelmed because they have an easy, monthly payment they are responsible for – like how you pay for a new cell phone! This way, patients can budget their finances accordingly without worrying about incurring additional costs charged by the lender. This is invaluable when dealing with a seemingly insurmountable amount of medical debt.

Affordability

Short-term: Short-term payment plans usually have higher monthly payment costs. A large sum of money broken up over a short period of time can lead to large and unmanageable monthly payments, but a lot of people go this route to avoid higher interest rates. This can end up being even more expensive though, especially if you are late on making payments or can’t afford your monthly bill.

Long-term: Parasail partners with patient advocacy companies and over a dozen lenders to make sure that the plans they offer are affordable for patients in a myriad of financial situations. With Parasail, medical bills can be broken into manageable monthly payments for 2 or 5 years. For example, an out of pocket expense of $5,135 can be paid in monthly payments of $244 over a span of 2 years. And that number does not change. Which means financing for medical bills can be made as simple as paying off that new iPhone 7+ you’ve been thinking about.

Credit Score

Short-Term: Using a credit card for medical expenses can negatively impact your credit score if you’re unable to pay it off in a couple of months. Bad credit scores can impede your ability to get a good mortgage rate, car payment, etc. Plus, poor credit scores are very hard to reverse, even after you’ve paid off your debt.

Long-Term: Parasail doesn’t affect your credit score. You can apply easily and securely online, and your credit score remains the same. That way, you can save your credit card for emergencies, and avoid the high balances that lead to bad credit scores.

It’s important to weigh your options and consider which route is best for you. You have to think about your personal financial situation and your amount of medical bills, to determine which kind of patient payment plan timeline will be more beneficial to you. Need help deciding? Find out how

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